DC Estate, Inheritance and Fiduciary Tax Returns

What is an estate tax?
The estate tax is a tax imposed on the transfer of the "taxable estate" of a deceased person.

When must it be filed?
A DC Estate Tax Return (Form D-76 or Form D-76 EZ) must be filed where the gross estate is:

$675,000 or more for individuals dying on or after January 1, 2001, even if the Federal Estate Tax Return (IRS Form 706, for decedents dying in 2002 and thereafter) is not required to be filed.

For a decedent whose death occurs on or after January 1, 2003, the unified credit is $345,800 and an estate tax return is not required to be filed if the decedent’s gross estate does not exceed $1,000,000.

Who must file?
The District of Columbia estate tax return must be filed by the Personal Representative responsible for administering the estate.

Where should returns be sent?
Mail returns and payments to the Office of Tax and Revenue, Audit Division, Estate Tax Unit, P.O. Box 556 Washington, DC, 20044-0556. Make the check or money order payable to the DC Treasurer.

What documents are required with form D-76?
Generally, the following documents are attached to Form D-76:

A copy of Form FR-77, if applicable;

A copy of the “Letters of Administration";

A copy of the Power of Attorney, if applicable;

A copy of the Will;

A complete copy of federal form 706, including schedules A through O and all attachments;

Extensions of time to file DC Estate Tax Return (Form FR-77)

Extension of time to file details:
Generally, the District of Columbia estate tax return must be filed and the tax paid within 10 months after the death of the decedent. However, a 6-month extension of time to file may be requested by filing an Application for Extension of Time to File DC Estate Tax Return (Form FR-77). The Office of Tax and Revenue does not accept the federal Form 4768.

When should extensions be filed?
The request for an extension of time to file must be submitted in duplicate on or before the original due date for filing Form D-76.

What is the interest rate?
Interest is charged at the rate of 10 percent per year, compounded daily (without regard to any extension).

What are the penalties?
A penalty of 5 percent per month or any fraction of a month up to a maximum of 25 percent of the tax will be imposed upon the failure to timely file a return and/or upon the failure to timely pay the tax. This penalty applies without regard to any extension of time in filing the return.

Where should requests be submitted?
Mail the completed Form FR-77 with your payment of any tax due to the Office of Tax and Revenue, Audit Division, Estate Tax Unit, PO Box 556, Washington, DC 20044. Be sure to sign and date the FR-77.

The payment should be made payable to the DC Treasurer and include the decedent’s social security number and the notation “FR-77”.

Fiduciary Tax Returns

What is a fiduciary?
A fiduciary is a person or business with the power to act for another and the responsibility for managing the assets and income of an estate or trust. A fiduciary may be a trustee, an administrator of an estate, a business adviser, attorney, guardian, real estate agent, banker, stockbroker, or title company.

Who must file a Fiduciary Return (form D-41)?
File a D-41 if you are the fiduciary of a DC estate or trust and:

The gross income for the estate is $1,675 or more for the taxable year; or
The gross income for the trust is $100 or more for the taxable year.
Do not file a D-41 if you were appointed by a judge to receive a trust or estate and represent only a part of the property of an individual.

What are other DC tax forms that a fiduciary may need to file?
INDIVIDUAL INCOME TAX (D-40 or D-40EZ): A fiduciary who is responsible for the income of a DC resident, such as a minor (or someone else unable to administer his or her own assets), must file an individual income tax return for that person in addition to the Form D-41.

D-40 For A Deceased Person: A fiduciary must file a D-40 for the last taxable year of the deceased person.

D-30 Unincorporaed Business Franchise Tax Return: A D-30 return must be filed by a trust located outside DC which has gross income in excess of $12,000 from DC rental and/or from other taxable DC trade or business property.

If the business is terminated, gain or loss is reported by the owners (if they are outside DC) to the jurisdiction of their domicile. A D-30 must be filed to report any depreciation recapture.

Inheritance Taxes

What is an inheritance tax?
The DC inheritance tax imposed under Chapter 19 of Title 47 of the DC Code is one based on the right to receive assets as a result of a decedent’s death. An Inheritance Tax Return is required for estates of decedents whose deaths occurred prior to April 1, 1987.

Who must file and when?
Every beneficiary of assets with a taxable situs in DC and with a value in excess of $1,000 must file an Inheritance Tax Return (Form FR-19) showing what the decedent owned, and Inheritance Tax Return Distribution Schedule (Form FR-19A) showing to whom such net assets are distributable within 15 months after death.